Is gifting crypto causing uncertainty about capital gains tax (CGT) liabilities? Many UK taxpayers who transfer cryptoassets assume a gift is tax-free. That assumption risks unexpected CGT bills, missed reliefs and poor records. This guide gives a concise overview, then detailed, actionable instructions to calculate disposals, claim reliefs such as holdover or charity relief, document on-chain gifts and report any requirement on a Self Assessment.
Key takeaways: what to know in one minute
- Gifting crypto is ordinarily a disposal for CGT: a transfer to anyone other than a spouse or civil partner is usually taxable at the market value on the date of transfer.
- Transfers to spouse/civil partner are generally exempt: these are made on a no-gain/no-loss basis unless the recipient later disposes of the asset.
- Charity gifts can avoid CGT provided the donation qualifies and is to a UK-registered charity; valuation and timing matter.
- Holdover relief may defer CGT when gifting assets into certain trusts or as an outright gift of business-related assets—crypto rarely qualifies but specific cases exist.
- Robust records are critical: timestamps, transaction IDs, wallet addresses, valuation source and written evidence of intent are required if HMRC queries the transfer.
How gifting crypto triggers CGT and how to calculate the taxable disposal
A gift of crypto is normally treated as a disposal at the asset's market value at the time of transfer. That market value sets the proceeds for CGT calculation even if no money changes hands. To calculate the taxable gain: use the market value as proceeds, deduct allowable costs (acquisition cost plus fees), apply matching and pooling rules (same-day, 30-day and Section 104 pooling), then apply the annual exempt amount (AEA) and tax rates.
Key steps:
- Establish the date of disposal (the time the transfer is executed on-chain or the platform records it).
- Determine market value in GBP at disposal: prefer a reputable exchange quote at the transaction timestamp; document chosen source.
- Apply matching rules: if multiple acquisitions of the same token exist, the HMRC matching rules may allocate which pool supplies disposed units.
- Compute gain/loss, subtract AEA (if available) and apply CGT rates relevant to the taxpayer’s income band.
Practical example (simplified):
- Bought 1 BTC on 2020-04-01 for £6,000.
- Gifted that 1 BTC on 2025-06-10; market value at transfer £30,000.
- Disposal proceeds £30,000 less acquisition cost £6,000 = gain £24,000.
- If annual exempt amount is £6,000 (2026 figure hypothetical), taxable gain £18,000.
Distinguishing lending interest from capital gains and income when gifting crypto
A gift is a disposal, not income. However, when crypto has generated lending interest or platform rewards that form part of an asset pool, tax classification matters. Interest from lending/platform activity is normally taxable as income in the year it is received, whereas gifting the underlying token is a disposal for CGT.
Practical implications:
- If tokens used for lending are subsequently returned or gifted, the original receipt of interest should have been reported as income. That does not eliminate a CGT event when the principal token is gifted.
- When a taxpayer gifts tokens that include accumulated income (for example, platform rewards automatically reinvested into the same token), separate treatment may be needed: the reinvested rewards may be treated as income at the point they were recorded as received, and the remaining principal is subject to CGT on disposal.
References and further reading: see HMRC's guidance on cryptoassets and on distinguishing income from capital: HMRC: Tax on cryptoassets.
Is lending interest from crypto taxable in the UK?
Yes, lending interest and rewards are generally taxable as income for UK residents. HMRC treats interest, staking rewards or platform returns as either miscellaneous income or trading income depending on circumstances. Key tests include the nature, regularity and intention behind the activity.
When it matters for gifting:
- If interest was earned before the gift, it remains income of the original holder and must be reported in the relevant tax year.
- The act of gifting the principal later triggers a CGT disposal; income tax and CGT are distinct and both may apply.
Where activity rises to a trading level (frequent lending, market-making), the entire stream might be taxed as trading income rather than capital gains. Seek specialist input where volumes and regularity suggest trading.
Reporting needs to reflect both income and disposals. On a UK Self Assessment return:
- Report lending interest, staking and platform rewards as other UK income or under trading income if applicable, using the Self Assessment supplementary pages where required. Include gross amounts and applicable expenses.
- Report disposals (including gifts) on the Capital Gains summary pages (SA108). Provide details of the disposal date, proceeds (market value for a gift), acquisition cost and computation of the gain.
- If the disposal leads to a loss, losses may be used against gains in the same year or carried forward; ensure losses are claimed and evidenced.
Useful HMRC link: HMRC: Self Assessment tax returns.
HMRC expects clear records that separate income receipts from disposals:
- Platform statements showing interest or rewards received, with timestamps and GBP values.
- Wallet transaction history proving transfer of tokens as a gift.
- Valuation evidence used for CGT (exchange rate snapshots, API outputs, or reputable aggregator records).
Record keeping is fundamental. HMRC requires records of acquisitions, disposals, receipts of income and any associated costs. For gifts, documentation must show intent to gift and the transfer itself.
Essential records to keep:
- Transaction IDs, blockchain addresses of sender and recipient, timestamps and network confirmations for the transfer.
- Evidence of the chosen market value at transfer (exchange snapshot, API export, third-party valuation).
- Written note or communication documenting the donor’s intent if the gift is not obvious (email, signed letter).
- Platform statements showing lending interest, staking rewards, fees and dates.
- Records of costs (exchange fees, wallet fees) directly attributable to acquisition or disposal.
Retention period: keep records for at least 6 years as HMRC may raise enquiries for earlier years. If a taxpayer is non-UK resident during the year of gift, extra care is needed because residency rules affect liability.
Gifting crypto: quick process flow
🔎 Step check before transfer
✅ Verify recipient address → ✅ Record market value → ✅ Export platform/wallet receipt
⏱ On-chain transfer
📤 Send token → ⛓ Capture txid & confirmations → 🧾 Save screenshot with timestamp
📋 After transfer
🏷 Note purpose of gift → 📁 Store valuation evidence → 🧾 Report on SA108 if taxable
Allowable expenses and reliefs for crypto lending income and gifts
Allowable expenses for lending/platform income typically include fees directly incurred to generate that income. For CGT on a gifted asset, allowable costs reduce the gain: acquisition cost, platform fees attributable to acquisition and disposal, and incidental costs.
Common allowable items:
- Exchange fees, transaction fees and gas costs directly linked to acquisition or disposal.
- Professional fees for valuation or tax advice specifically related to the disposals (claimed in some circumstances).
- For income, any cost wholly and exclusively incurred to generate the income (rare for casual lenders).
Reliefs specific to gifting:
- Transfers between spouses/civil partners are no-gain/no-loss (exempt).
- Gifts to charities registered in the UK can be exempt from CGT; additionally, donors may be eligible for income tax relief on the gift (subject to rules). Proper valuation and gift documentation are essential.
- Holdover relief: generally applies to business assets or agricultural property when qualifying criteria are met. Most personal crypto gifts will not meet holdover relief tests, but each case must be reviewed for business use or trust-related transfers.
When holdover relief or charity relief may apply to crypto gifts
Charity relief: a gift to a UK-registered charity can be treated as a disposal at nil consideration if the charity is eligible and the gift is properly documented. The donor should obtain a written acknowledgment from the charity and keep valuation evidence.
Holdover relief: this relief defers the gain where qualifying business assets are gifted and the conditions are satisfied. Because crypto is usually a personal investment, holdover relief will apply only in exceptional circumstances where crypto constitutes a qualifying business asset. Professional advice is recommended when considering this relief.
HMRC treats P2P and DeFi income as taxable where benefits are received. For gifts involving assets that were previously on lending platforms:
- Demonstrate when interest or rewards were realised and included in income.
- Ensure the disposal (gift) is recorded at market value and that pooled units are allocated correctly in line with HMRC matching rules.
- Provide chain-of-custody evidence if assets have moved across multiple platforms or wallets prior to gifting.
HMRC increasingly examines DeFi activity: automated rewards, airdrops or wrapped tokens can complicate valuation and timing. Accurate snapshots and independent valuations strengthen any reporting position.
Practical checklist before gifting crypto to minimise CGT risk
- Confirm whether the transfer is to a spouse/civil partner (no immediate CGT) or to another recipient (disposal).
- Take an on-chain or platform timestamped evidence of the transfer and retain the TXID.
- Capture a GBP market value at transfer from a reputable exchange, record the source and exact time.
- Record acquisition history for matching/pooling computation and any fees to include as allowable costs.
- Determine whether the gift qualifies for charity relief or any form of holdover relief; obtain written confirmations from charities or trustees.
- If previously used in lending or staking, ensure income has been reported separately and keep supporting statements.
| Transfer type |
Tax outcome |
Evidence required |
| Transfer to spouse/civil partner |
No-gain/no-loss transfer |
Transfer record, marriage/civil status proof if requested |
| Gift to UK charity |
Usually CGT exempt; income tax relief may apply |
Charity acknowledgment, valuation evidence at transfer |
| Gift to third party |
Disposal at market value — CGT may apply |
TXID, valuation source, acquisition cost records |
How to execute and document an on-chain gift: step-by-step (practical how-to)
- Prepare recipient address and confirm identity if necessary.
- Choose and record valuation source and capture an exchange/API snapshot at the time of transfer.
- Transfer the token, wait for network confirmations and copy the TXID immediately.
- Save screenshots of the wallet and platform pages showing the outgoing transfer, timestamp and recipient address.
- Create a short written record of the gift purpose (email or signed note) and, for charity gifts, obtain an official receipt.
- Add the disposal to the CGT calculation spreadsheet and log whether the transfer will be reported on Self Assessment.
This stepwise process is modelled in the HowTo schema included with the article.
Advantages, risks and common errors when gifting crypto
✅ Benefits / When gifting makes sense
- Estate planning and simplifying succession where transfers are intended ahead of death.
- Supporting family or charity without immediate cash conversion, possibly preserving future upside for the recipient.
- Avoiding platform withdrawal fees when transfers are cheaper on-chain.
⚠️ Errors to avoid / Risks
- Failing to record a reliable market value at the moment of transfer.
- Confusing income receipts from lending/staking with the disposal of the underlying token.
- Assuming holdover relief applies without checking qualifying conditions.
- Sending tokens to an incorrect address—irreversible and complicates tax records.
Questions frequently asked about gifting crypto & CGT reliefs
Which transfers are exempt from CGT in the UK?
Transfers between spouses or civil partners are usually on a no-gain/no-loss basis and therefore exempt from CGT at the time of transfer.
Does gifting to a charity avoid CGT for crypto?
Gifts to qualifying UK charities are typically exempt from CGT; additional income tax relief may be available. Keep written confirmation from the charity and valuation evidence.
How should the market value of crypto be proved for a gift?
Use a reputable exchange price snapshot or API export at the transfer timestamp and save screenshots or CSV exports as evidence of valuation.
Is a gift of crypto always taxable even if the recipient pays no money?
Yes, the disposal is treated at market value for CGT purposes even if no consideration is received, except for certain exemptions.
Can holdover relief be used for crypto gifts?
Holdover relief applies mainly to qualifying business assets and is rarely available for personal cryptocurrency; professional advice is recommended for borderline cases.
How long should records of a crypto gift be kept?
Keep records for at least six years from the end of the tax year in which the disposal occurred, as HMRC may enquire about historical transfers.
What happens if the recipient later disposes of gifted crypto?
If the gift was between spouses/civil partners on a no-gain/no-loss basis, the recipient’s base cost becomes the donor’s original acquisition cost when they later dispose.
Should a taxpayer declare small gifts under the annual exempt amount?
If total gains in the tax year (after allowable losses and costs) stay within the annual exempt amount, no CGT is payable but records should still support that position.
Your next step:
- Export transaction histories and capture valuation evidence for any planned gift.
- Decide whether the recipient is a spouse, charity or third party and seek professional advice if considering holdover relief.
- Prepare Self Assessment entries: declare any lending income in the appropriate income section and list disposals (gifts) on SA108 if gains exceed the annual exempt amount.